The Cooperative Societies Act makes CAC registration only Step 1
.CAC makes you a legal entity.
The State Ministry of Commerce/Cooperatives makes you a “cooperative society.”
You need both to operate fully.
The Two Laws Involved
Companies and Allied Matters Act [CAMA 2020] and CAC
Registers you as a legal person under “Incorporated Trustee” for non-profit bodies.
Gives you: Corporate name, RC number, legal capacity to sue/be sued, open a bank account. Does recognize you as a “Cooperative Society” or give you cooperative powers.
Cooperative Societies Act [Cap C20 LFN 2004]
- State Ministry of Commerce/Cooperatives Registers you specifically as a Cooperative Society under the Ministry. Gives you: Cooperative registration number, power to mobilize thrift/savings, give loans to members, enjoy tax exemptions, and be supervised by the Registrar of Cooperatives. You cannot get this without a CAC certificate first.
Think of it like this: CAC equal Birth Certificate.
The Ministry of Cooperatives gives Cooperative Identity Card.
CAC Registration Requirements for a Cooperative
Under CAMA 2020, cooperatives register as Incorporated Trustees, not as a Limited Liability Company.
CAC will ask for
Name Approval
proposed names ending with “Cooperative Society Ltd” or “Multipurpose Cooperative Society Ltd”.
Trustees
Minimum of 10, maximum no limit. Must be 18+, Nigerian, of sound mind. Provide ID, passport, BVN.
Constitution
Governing documents stating aims, trustees, property holding powers.
Registered Address Nigeria.Form CAC/IT Form 01: Statutory declaration and affidavit.
Result: You get a Certificate of Incorporation with an RC number. You can now open a corporate bank account.
. Ministry of Commerce/Cooperatives Registration Requirements*
After CAC, you go to the State Ministry of Commerce, Industry and Cooperatives where you operate.
They will ask for:
CAC Certificate and Constitution, proof you exist legally.
*Minimum Members: Usually 10-20 adults for a multipurpose society, depending on the state.
By-Laws, Detailed operational rules: membership, shares, savings, loan policy, meetings, audit. More detailed than the CAC constitution.
Feasibility Report , Business plan, source of funds, proposed activities.
Office Address , Inspection,Officers may inspect your office.
Registration Fee , Annual Returns,Varies by state.
Result You get a Cooperative Registration Certificate with a Coop No. e.g. KGS/COOP/1234. You now come under the supervision of the Director of Cooperatives.
Why You Need Both
If You Only Do CAC. Without doing both ,
You’re just an NGO/Association. You are a recognized Cooperative Society.
Banks may not allow “thrift & loan” activities. You can legally mobilize members’ savings & grant loans.
No supervision or audit from govt. You get training, audit, dispute resolution from the Ministry.
No access to cooperative-specific grants/funds.
Eligible for CBN, SMEDAN, BOA, state cooperative funds.
No tax exemption benefits under the Act. But Can apply for tax exemptions as provided in the Act.
Key Takeaway for Cooperatives in Nigeria*
Step 1: CAC First and Legal personality, bank account, corporate name.
Step 2: State Ministry of Cooperatives Secondand Full cooperative status, right to do thrift/credit, government oversight and support.
Skipping the Ministry means you’re operating as an association, not a cooperative. Skipping CAC means the Ministry cannot register you.
Classes of Cooperative Society Members in Nigeria*
Under the Nigerian Cooperative Societies Act Cap C 20 LFN 2004 and most State Cooperative Laws, members are not all treated exactly the same.
The law and your society’s by-laws usually create “classes” to manage rights, responsibilities, and risks.
Think of it like membership tiers.
The 5 Main Classes of Members
Ordinary/Full Members
Adults 18+ who have bought the minimum shares, paid entrance fees, and been admitted. They are the core owners. 1. Vote in elections – 1 member, 1 vote.
. Be elected as an executive.
. Access loans, dividends, patronage rebate.
. Attend AGM & make decisions. Must buy shares, save regularly, repay loans, attend meetings, abide by by-laws.
. Associate Members*
Persons who are not yet full members. Often minors, corporate bodies, or persons who haven’t met full share capital. Can save, do business with the coop, attend meetings but no voting right,. can enjoy some services. Pay lower fees. Cannot be elected or vote. Limited loan access.
. Nominal/Honorary Members
Persons conferred membership for service to the coop or community.
Example
: Retired founder, government official, patron. May attend meetings, give advice. ,No voting, no loan, no dividend unless by-law says otherwise. No financial obligation. The title is for recognition only.
Minor Members
Persons under 18 years who are children of members or students in school coops. Can save and receive welfare benefits. No voting, cannot guarantee loans, cannot hold office Guardian must sign for them.
Cease to be minors at 18 and can convert to full members.
. Institutional/Corporate Members
Other registered cooperatives, trade unions, NGOs, or companies that join. Can do business with the society, may have representatives at meetings.
Voting depends on by-laws often limited to 1 vote regardless of shares. Must appoint a representative. Liable only to the extent of shares held.
3 Key Principles That Cut Across All Classes
One Member, One Vote
This applies to Full Members only. Unlike companies, you cannot buy more votes by buying more shares. That’s to prevent a few rich members from controlling the coop.
Voluntary & Open Membership:
You cannot deny membership based on tribe, religion, or gender if they meet the by-law conditions. But you can have classes to protect the society.
. Liability is Limited: All member classes have liability limited to the value of shares they hold. Members are not personally liable for Co-operatives debts.
Why Cooperatives Use Classes
Risk Management
Don’t give loans/voting power to people who haven’t committed capital yet such as Associate Members.
Inclusion
Bring in youths or Minor Members, or partners to Corporate Members, without diluting control.
Recognition
Reward service without financial risk to Honorary Members.
Graduation Path
Associate to Full Member after meeting share/savings targets. This builds discipline.
What Your By-Laws Must State
The Cooperative Societies Act requires every registered society to define in its by-laws:
- Minimum shares and entrance fee for Full Members.
2 Conditions to move from Associate to Full Member. - Age limit for Minor Members.
Whether Corporate/Honorary Members can vote.
If it’s not in the by-laws, the Ministry of Cooperatives will not approve it.
Full Members run the society. Associate and Minor Members learn and save. Honorary and Corporate Members support.
The structure keeps the coop democratic, safe, and inclusive at the same time.
The Doctrines of Cooperative Spirit in a Cooperative Society
The Cooperative Spirit is not just a slogan. It’s the set of values and principles that separate a cooperative from a normal company.
In Nigeria, these come from the ICA Cooperative Principles and are domesticated in the Cooperative Societies Act Cap C20 LFN 2004 and State by-law templates.
If members don’t adopt these, the cooperative becomes just another “ajo group” that collapses.
The 7 ICA Doctrines / Principles of Co-operatives
. Voluntary and Open Membership
Membership is open to all who can use the services and accept responsibilities, without discrimination. You join and exit freely.
Inclusion & TrustNo one is forced in, no one is shut out because of tribe, religion, gender, or status.
Democratic Member Control
1 Member = 1 Vote. Not 1 Naira = 1 Vote. Elected leaders are accountable to members at AGM., Equality & Ownership or poor, everyone has equal say. Leaders are servants, not bosses.
Member Economic Participation
Members contribute equitably to capital. They control it democratically.
Surplus is allocated for: reserves, member benefits, and community. Limited dividend on shares.
Shared Responsibility & Fairness
Everyone contributes, everyone benefits according to patronage, not shareholding.
Autonomy and Independence
Coops are self-help orgs controlled by members. If they take govt or donor money, they do it on their own terms ,Self-Reliance & Integrity ,No external person can hijack the society.
Education, Training and Information
Coops educate members, elected reps, managers, and the public about cooperation. Growth & Transparency: An ignorant member cannot protect the coop. Knowledge prevents fraud.
. Cooperation Among Cooperatives
Coops serve members most effectively by working together through local, national, regional, and international structures. Solidarity,: Coops don’t compete to kill each other. They buy together, sell together, audit together.
7. Concern for Community, Coops work for sustainable development of their communities through policies approved by members., Service & Social Responsibility: The coop is not only for profit. It must impact its environment.
3 Underlying “Spiritual” Values Behind All 7 Doctrines
Nigerian cooperative officers often summarize the 7 principles into 3 attitudes members must have:
- Self-Help: “We will solve our problems together.” No waiting for the government or one rich man.
- Self-Responsibility: “My loan, my savings, my attendance is my duty.” The coop cannot succeed if members are lazy.
- Solidarity: “Your problem is my problem.” When one member struggles, others don’t exploit it , they support it, because next time it could be them.
What Happens When the Cooperative Spirit is Missing
No Democracy
Executive hijacks funds and members run away.
No Education
Members don’t know their rights and fraud thrives.
No Solidarity
Members take loans and disappear and society collapses.
No Concern for Community
Society is seen as selfish and government withdraws support.
The doctrines are: Openness , Democracy , Fair Economics , Independence ,Education , Cooperation ,Community., Lived together, they created the “cooperative spirit”
The CAC gives you legal life. The Ministry gives you cooperative status. But these 7 doctrines give you longevity.
Multipurpose Cooperative Society vs Other Cooperative Organizations in Nigeria
The main difference is scope of activities. A multipurpose coop is a “one-stop” cooperative, while other types are “specialist” cooperatives.
All of them are still guided by the same Cooperative Societies Act Cap C20 LFN 2004 and the 7 ICA doctrines.
What is a Multipurpose Cooperative Society?
Definition
A society that combines 2 or more cooperative activities under one registration to meet members’ diverse needs.
Typical Activities in One Society
- Thrift & Credit: Members save and borrow money.
- Consumer: Bulk buying of foodstuff, rice, fuel, solar items at discount.
- Production: Farming, poultry, fishery for members.
- Marketing: Sell members’ goods collectively.
- Housing/Welfare: Land acquisition, building materials, emergency support.
. Other Main Types of Specialized Cooperatives
Thrift & Credit Cooperative [TCC]
Savings and Loans only. No trading. Workers, groups who need credit. Cannot do rice sharing, farming, or land. Must stick to finance.
. Consumers Cooperative
Bulk buying and retail for members at lower prices. Communities, estates, offices. Cannot give loans or do farming.
Agricultural/Marketers Cooperative
Farming inputs, production, processing, marketing of farm produce. Farmers, agro-traders. Cannot run a general loan scheme outside agric.
. Industrial/Artisans Cooperative
Production by craftsmen: tailors, welders, bakers. Joint purchase of tools, joint marketing. Skilled artisans. Cannot do general thrift for non-artisans.
Housing Cooperative
Land acquisition, estate development, building materials. People who need houses/plots. Cannot give business loans or trade goods.
. Transport Cooperative
Purchase of vehicles, spare parts, fuel at discount, welfare for drivers. Keke, bus, truck drivers. Cannot do farming or general consumer store.
So Which Should You Choose?
Choose Multipurpose
Your members have different needs , some want loans, some want cheap rice, some want land. Best for mixed groups like churches, offices, estates, communities.
Choose Specialized ,if Your members are homogeneous with one clear need.
Example
All are farmers and Agric Coop.
All are drivers and Transport Coop.
Easier to manage and Ministry supervises better.
Important note
Even a multipurpose coop must state all activities clearly in its by-laws.
You cannot add “real estate” later without Ministry approval.
Multipurpose coops are the most common in Nigeria because Nigerians have multiple needs and want one society to solve them.
– Benjamin Ibrahim writes from Lokoja, Kogi state.
+2348069596250
